Susan

I owe $150,000 and earn about $4000 net per month. I was considering a consumer proposal as the interest on my credit cards are high and it would take many years to pay this debt off. My trustee told me I would have to make 60 payments of $1800 which may get accepted by the creditors. The trustee fees are just over $20,000. Does this amount sound reasonable or would a lower proposal be accepted? Is the amount determined by my income? Thanks in advance for sharing your expertise.

One Response to “Susan”

This is a difficult question to answer without actually sitting across a desk and reviewing all the details of your situation. However you fill find the following:

1. The trustee fees are set by the legislation so will fluctuate depending on the offer that is made. It is essentially composed of two one time draws of $750.00 and then 20% of what is going out to creditors.

2. The size of the actual offer is more challenging to critique. The consumer proposal must be crafted based on your level of income, your monthly living expenses, the expectations of the specific creditors you are dealing with, and what type of recovery would be available in a bankruptcy. So as you can see it is no one formula that can be used. So without seeing these details I simply am not in a position to critique whether this is a fair offer or whether you are offering more than you need.

If the offer seems to be higher than necessary you are best to either discuss why this is the offer that needs to be made with your trustee, or if you are not comfortable you may want to consider discussing things with another trustee. It is important that you have confidence in the trustee you are working with.